Penticton strata properties more likely to see tax decrease

Differences in property assessment adjustments means most single-family homes will face tax increase

Tax notice have been arriving in mailboxes around Penticton this week, but when some homeowners opened their envelope, they were surprised to find their taxes had gone up.

In the case of one homeowner in the north end of the city, he was surprised to find that even though the assessed value of his home had dropped slightly — less than one per cent — his municipal taxes had risen by about $40. A condo owner in the same area, with a 3.2 per cent decrease in assessment, also saw a rise in his municipal taxes, albeit by only $1.

In May, Penticton council and staff announced that they were holding the line on city expenses, and that residential owners would likely see a decrease in taxes as assessments in the city’s various sectors shifted.

“When we say net zero, we are saying our total tax requirement that we levy to people 2012 versus 2011 hasn’t changed,” said Doug Leahy, the city’s chief financial officer. “We are still collecting about $24.8 million. What has changed would be the mix of the assessment base, which we don’t control.”

Overall, the assessed value of residential properties in Penticton dropped by about four per cent, with a substantial difference between regular residential and strata properties: 1.2 per cent versus a decline of 7.6 per cent for strata.

In the case of both these homeowners, the assessment dropped by less that the average, which Leahy said accounts for the rise in their taxes. He describes the tax rate as a balancing act, where the changes in the total assessed value of properties — not just in residential, but all seven classes on the city’s tax rolls — have to be counterbalanced by a rate change to bring in the required amount.

“We have had a net zero, but the key thing is that $24.8 million,” said Leahy, reiterating that the city is not collecting any more money than last year. “If an assessment base is shifting more or less than average, then a person will see that shift accordingly. At the end of the day, the City of Penticton is still only receiving the $24.8 million.”

What these examples show, said Leahy, are homes where the assessment dropped less than the average, especially for the house owner, and is part of the reason for the increase in municipal taxes.

“What that is showing you is that he has increased more than the norm, that’s why he is going up,” said Leahy. “If his assessment had dropped the same as everyone else, he should have seen a similar effect, where the tax increase would have been close to zero.”

 

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